On July 28, 2003, the Company initiated production from its Eugene Island 27 field, which was a 2002 exploratory discovery. The Company owns a 100% working interest in this field.
During the second quarter, the Company was awarded the six leases on which it was high bidder during the Central Gulf of Mexico Lease Sale 185 held in March 2003. The six new leases total approximately 30,000 gross acres.
Bachmann continued, "So far this year, we have successfully drilled seven of eight exploratory wells for an 88% success rate. Our strong cash flow combined with our ongoing drilling success has encouraged us to expand our capital and exploration budget for 2003. We recently announced that we intend to invest $110 million in that program, a 22% increase over the $90 million budget established at the beginning of the year. The second half of 2003 will be particularly busy, as we now plan to drill as many as 16 to 17 additional exploratory wells by year-end. Furthermore, we anticipate that at current price levels we will generate additional free cash flow that will be available to fund acquisitions or for other purposes."
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